2001 (9) TMI 376 - AT - Central Excise

Summary

Issues:
1. Availability of deemed credit
2. Eligibility to avail exemption under Notification No. 202/88

Analysis:

Issue 1: Availability of Deemed Credit
In Appeal No. E/4632, the appellant contested the denial of Modvat credit by the Asstt. Collector, arguing that the inputs used were not waste or scrap, making them eligible for deemed Modvat credit. The Commissioner (Appeals) rejected the appeal, stating that the inputs were essentially wastage and scrap, not suitable for manufacturing the final product economically. The appellant relied on the case of Kamakhya Steels (P) Ltd. v. CCE, Meerut, where the Tribunal remanded a similar matter for reevaluation based on rule amendments. The appellant emphasized that there was no evidence proving the inputs were waste and scrap, asserting their eligibility for deemed Modvat credit and benefit under Notification No. 202/88.

Issue 2: Eligibility for Exemption under Notification No. 202/88
The denial of Modvat credit in Appeal No. E/5264/91-B was challenged due to non-filing of a declaration under Rule 57G. The appellant argued that the Larger Bench decision mentioned earlier should apply in this case as well. The Department contended that the inputs were purchased from scrap dealers and not declared as prime quality, thus constituting waste and scrap. They referenced precedents to support their stance. The Tribunal found that if inputs were considered waste and scrap, Modvat credit could not be denied, granting the credit in Appeal No. E/5264/91.

Final Decision:
The Tribunal found discrepancies in the show cause notice regarding the declaration of manganese, leading to a remand for further evaluation by the Asstt. Commissioner. It was established that the appellants did not purchase eligible inputs for deemed Modvat credit, affirming the denial of credit and exemption under Notification No. 202/88. However, in Appeal No. E/5264/91, Modvat credit was allowed due to the Department's conflicting views on the inputs. All three appeals were disposed of accordingly.